Bona fide post-winding-up disposition validated where project transfer served company interest and stamp duty objections failed.

A post-winding-up disposition may be protected under Section 536(2) if it is bona fide, fair, just and in the company's interest. The Bombay HC found the 2019 agreements assigning the remaining Jigaon project work valid because the company lacked capacity to complete its share, the arrangement reduced delay and penalty risk, and the applicant had taken over the work and liabilities in substance. Objections based on insufficient stamp duty, absence of VIDC permission and lack of consideration failed: stamping affected admissibility, not validity; the internal arrangement had already been acted upon; and consideration was shown through transfer of work and liabilities. The transaction was therefore validated and preserved.

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Issues: Whether the transaction embodied in the 2019 agreements assigning the remaining Jigaon project work to the applicant could be validated under Section 536(2) of the Companies Act, 1956 as being bona fide, fair, just and reasonable and in the interest of the company, and whether objections based on insufficiency of stamp duty, absence of VIDC permission, and want of consideration defeated such validation.

Analysis: Section 536(2) operates as an enabling provision because the Court is empowered to order otherwise, and dispositions made after commencement of winding up are not automatically void ab initio. The governing test is whether the transaction was necessary or expedient in the interest of the company and its stakeholders, bona fide entered into, and deserving of protection in equity. On the facts, the company had become financially incapable of completing its share of the work, the project was under delay and penalty risk, the applicant took over the remaining work and liabilities, and the arrangement had already been acted upon. The prior Division Bench findings that the subcontracting arrangement was for the overall benefit of the joint venture and the company, as upheld by the Supreme Court, reinforced the conclusion. The stamp-duty objection did not succeed because insufficiency of stamping affects admissibility, not the underlying validity of the arrangement, and the court was not called upon to decide admissibility in evidence. The objection based on lack of VIDC approval was also rejected because the correspondence relied on did not displace the internal arrangement already acted upon and accepted in substance. The plea of absence of consideration likewise failed on the facts of transfer of work, liabilities and project execution by the applicant.

Conclusion: The 2019 agreements were valid and liable to be protected and validated under Section 536(2) of the Companies Act, 1956, and the objections raised against them were rejected.

Final Conclusion: The application succeeded, the impugned transaction was preserved as a bona fide and beneficial arrangement for completion of the project, and the official liquidator's contrary report did not survive.

Ratio Decidendi: A disposition of company property made after commencement of winding up may be validated where the Court finds it bona fide and in the interest of the company, and an insufficiency of stamp duty does not by itself render such transaction void.

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